IN THIS ISSUE: Electronic transactions 101 New view on multiple monitors
Contents PRIMARY AGENT MAGAZINE
Hard facts about digital documents Keep up with technology to keep your agency costs down. Transacting electronically is legal, beneficial and easy to adopt thanks to the newest products. In this article, you’ll learn the why, how and what of electronic transactions.
Page 8 Multiple monitors: new view on productivity If two monitors are better than one, it stands to reason that three (or more!) lead to even greater productivity. Here, insurance-tech guru Steve Anderson makes a case for more monitors — and new ways to use them.
Page 14 Small-town agency, big-time success
A few years ago, a trifecta of events led to changes that helped move Cheney Insurance to a new level. In February, the agency joined a regional alliance of likeminded firms. In April, they signed on with an insurance-focused digital marketing and training firm. Finally, at year end, Dennis Hilton bought the agency from his parents. Learn lessons from Hilton’s successes.
Page 20 Mission Statement Primary Agent delivers ideas to help Insurance Agents & Brokers’ members negotiate their unique position as guardians of trust between insurance consumers and companies while facing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission to preserve and advocate the American Agency System.
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Subscriptions: Non-member price: $2.25 per copy or $15 per year. All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two months prior to publication. Advertising rates furnished upon request. Address inquiries to: Primary Agent Editor 5050 Ritter Road Mechanicsburg, PA 17055-0763 Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347 Periodical postage paid at Mechanicsburg, Pa. and additional entry post office. Postmaster: Send address changes to above address. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2014-2 is published monthly by IA&B Service Group Inc., a subsidiary of IA&B. Copyright 2014. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.
Board of Directors Officers G. Greg Gunn, CIC Chair of the Board Lemoyne, Pa. Diana M. Hornung Hanby, ACSR Vice Chair of the Board Wilmington, Del. Norman F. Basso, CPCU Immediate Past Chair of the Board York, Pa.
Members Henry “Butch” Bradley, Jr. Forest Hill, Md. E. Stephen Burnett, CIC, ARM Wilmington, Del. Richard F. Corroon, CPCU Wilmington, Del. N. Lee Dotson, CIC, AAI Wilmington, Del. Michael P. Ertel Columbia, Md. John L. Frankenfield Telford, Pa. John B. Hollister Milford, Pa. Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa. Robert S. Klinger, LUTCF, CPIA+ Germantown, Md. Douglas A. Loesel, CPCU Erie, Pa. Michael F. McGroarty Sr. Pittsburgh, Pa. Craig S. Mader Gambrills, Md. Ann Gallen Moll, CIC Reading, Pa. Joseph R. Pastor, CPCU, AAI Oil City, Pa.
G. Greg Gunn, CIC
Chair of the Board’s M
Small changes can make all the difference I’m not going to sugarcoat it (even during this chocolate-covered Valentine’s season): Running an independent agency is tough. Customers’ and carriers’ expectations are on the rise, and the time and resources needed to investigate and implement agency responses are scarce. But there is good news: Sometimes small changes can make all the difference. This issue of Primary Agent magazine explores one of them — electronic transactions. The feature article beginning on page 8 explains what you need to know (think: compliance and workflow considerations) and how you can benefit from sending documents and securing signatures electronically. If you missed it, I encourage you to set aside some time to take in IA&B’s recorded Power Hour webinar on the topic, as well. You’ll learn that there’s nothing to lose and quite a lot to be gained from this technology … a little secret direct writers have been hoarding for years. This research is just another way your association supports your success. Remember that, when the going gets tough, you don’t need to go it alone. The IA&B board and staff are committed to assisting you and your staff no matter what tomorrow brings. Until next time,
Richard M. Rankin, CIC Lancaster, Pa. April E. Ressler, CIC Altoona, Pa. Scott C. Rogers, CPIA* York, Pa. David B. Wasson Sr., CIC State College, Pa.
G. Greg Gunn, CIC Editor’s note: IA&B’s library of recorded Power Hour webinars and corresponding resources is available at IABforME.com/power_hour.
Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del. * Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director
Ask our Experts QUESTION: I have an elderly named insured, and her daughter takes care of her finances but does not have a Power of Attorney. Is there a form available to get permission for someone to ask questions and make changes to a policy on behalf of the named insured?
The proper way to handle such a situation is for the daughter to secure a true Power Of Attorney (POA) from the named insured and provide you with a copy. The daughter is not the named insured, is not a party to the contract, and cannot make policy changes without a Power of Attorney. If your insured wants to secure a POA, the best would be to suggest she contact her attorney.
changes. Along with the sample, we provide a guide identifying who should be signing the delegation of authority based on the customer’s business structure (sole proprietorship, partnership, corporation, etc.). To access this resource, simply visit IABforME.com/EO_prevention and select “Granting authority to sign insurance documents.”
“Asking questions” is a different matter, which speaks to your privacy obligations: You may be able to share information with the daughter if you have secured consent from the named insured. A POA would not be necessary for that purpose. Any other way of evidencing her consent would be acceptable (although we would encourage you to get it in writing).
HAVE A QUESTION? ASK OUR EXPERTS! Rely on our experts to answer your most perplexing questions. Visit the new Ask Our Experts section of IA&BforME.com (find the link in the website footer) to submit your question and review answers to other frequently asked questions. Or email your question to us at IAB@IABforME.com. We look forward to hearing from you!
Although not directly related to this question, if this were a commercial risk where the producer may be discussing coverage with a risk manager rather than an officer of the corporation, we have developed a form that enables the officer of the corporation to delegate authority to discuss insurance and make certain
Primary Agent | February 2014
State News Does your referral program cross the line? Pennsylvania law places strict parameters around referral fees. Mind the rules to make sure your actions don’t become violations. Does this sound familiar? A customer provides a personal-lines referral. In return, you put his name into that month’s drawing and then again into your annual, year-end drawing. That’s a common violation of Pennsylvania law, which states that a personal-lines referral fee must be a one-time reward. Improper use of referral fees is one of the top 10 violations seen by the Pennsylvania Insurance Department. Other stipulations require the referral fee to be “nominal” (a term not defined by law), a fixed dollar amount and not conditioned on an actual sale. Our online Q&A provides everything you need to know about creating a legally compliant referral program. IABforME.com/PA/referral_fees
Pa. join ranks of 29 states with insurance e-card laws Issuing electronic proof of insurance and offering no-deductible collision coverage will become realities this month. Alert your auto insurance customers to changes coming down the pike. Legislation signed by the governor on Dec. 23 will allow insurance companies to: w Electronically issue financial responsibility identification cards, if both the insurer and insured agree w Offer insurance policies with no minimum deductible for collision coverage (which appeases carriers such as Nationwide) The provisions take effect Feb. 21 and will apply once an insurance policy is issued or renewed.
Wallets to take a hit from Pa. transportation law Show your value to customers by keeping them apprised of the repercussions of the $2.3 billion transportation infrastructure package, which Gov. Tom Corbett signed into law late last fall. Drivers will feel the pinch, as the new measure will raise millions of dollars with higher fees on licenses, permits and traffic tickets. Of note: w Motorists who allow their insurance to lapse will have the option of paying $500 in lieu of the currently mandated three-month vehicle registration suspension. w Motorists may elect to pay an annual vehicle registration fee for a two year period, with the fee being two times the amount of the registration fee otherwise payable. w The fine for “failure to obey traffic control devices,” (frequent offenders are familiar with this commonly written citation) will increase from the current $25 to $150. However, surcharges now added to the existing $25 cannot be added to the new amount. w Registration fees for passenger vehicles, light trucks and motorcycles will be increased by the amount of inflation, beginning in 2015.
WC firefighter cancerpresumption law in the hot seat Securing workers’ compensation (WC) for firefighters has become increasingly difficult in the past two years. The state legislature is finally considering the fallout from its 2011 amendment to the Workers’ Compensation Act that includes cancer as an occupational disease for Class 994. Producers’ difficulty finding WC coveragefor fire departments finally is receiving legislative attention. A mid-December joint hearing of the House Labor and Industry and House Veterans Affairs and Emergency Preparedness committees focused on the affordability and availability issues following a 2011 state law that designated cancer suffered by a firefighter as an occupational disease. The committees heard testimony from stakeholders, including fire fighter associations, township and borough representatives, and insurance trusts regarding implementation and impacts of the law – namely the large number of carriers that dropped WC for fire departments, forcing the State Workers Insurance Fund to pick up nearly 40 percent of the market. Perspectives and suggested “fixes” were numerous and will likely result in long-term legislative negotiations. We were on hand for the hearing and will continue to monitor the issue in the months ahead.
Workers’ comp loss costs set to decrease As this issue of Primary Agent went to print, workers’ compensation loss costs and related rating values were slated to dip slightly for policies with effective dates on or after April 1. The Pennsylvania Compensation Rating Bureau’s loss cost filing recommended an overall average loss cost decrease of 5.15 percent. We attended a December briefing on the proposal, where PCRB reps noted that frequency continues to decrease, which offsets the increase in severity for indemnity and medical claims.
Wayne D. Evans Insurance Agency Middletown, Pa. Stetler Insurance Danville, Pa. The Navage Insurance Group Beaver Falls, Pa. The Blake Agency Inc. Newtown Square, Pa.
w Drivers’ license fees – except photo ID, probationary, occupational and commercial driver’s licenses – will remain at the current levels, until all fees are indexed to inflation beginning in 2015.
Dur-America Brokerage Inc. Long Island, N.Y.
Primary Agent | February 2014
Coverage COR N E R
WHAT DOES THE CONTRACT SAY?
JERRY M. MILTON, CIC Jerry M. Milton, CIC teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He is also the education consultant for IA&B, working with CISR, CIC and continuing education programs.
A contract is an agreement between two or more persons which creates an obligation to do or not to do a particular thing. The contract not only obligates a person to do or not to do something; it is also used to transfer the obligation to pay for the financial consequences of certain losses from one person (indemnitee) to another (indemnitor).
insurance. These two sections are usually titled “Indemnification” and “Insurance Requirements.” The Indemnification section details what and who the indemnitor is responsible for. The Insurance Requirements section lists the policies of insurance the indemnitor is required to purchase and maintain. The Insurance Requirements section will not only list the policies of insurance required, but will also stipulate the minimum limits required, that certain persons be added to the indemnitor’s policies as additional insureds, and that the indemnitor’s policies be primary and non-contributory for all insureds. Sound familiar? I’m sure I haven’t told you anything you don’t already know.
Who will be the indemnitee and the indemnitor is determined when the contract is negotiated. The person holding the most power can, and will, demand indemnity from the other person to the contract. The indemnitee operates from a position of power, and the indemnitor operates from a position of weakness. Contracts have two sections that must be addressed by the indemnitor’s policies of
The big question is, “Do the policies of insurance
and the endorsements that have been attached to the policies satisfy the requirements of the Indemnification and Insurance Requirements sections?” The answer is, “Maybe, maybe not.” The first question is, “Who did the indemnitor agree to indemnify, hold harmless or save and add as additional insureds?” The answer could be, “The indemnitee only,” or it could be, “The indemnitee, its officers, directors, employees, agents and representatives.” It’s probably the latter. That means we have to provide coverage for all these persons under the indemnitor’s policies. We usually address this requirement with an additional insured endorsement. If the indemnitor is a contractor, we have several options. We can
use the Additional Insured — Owners, Lessees Or Contractors — Scheduled Person Or Organization endorsement (CG 20 10). We have to name each person or organization to be included as an additional insured and list the location(s) of covered operations. So, every time the contractor gets a new job, we have to issue a new endorsement. A lot of work. However, this endorsement allows us extend additional insured status to all persons or organizations required by the contract. Then there’s the Additional Insured – Owners, Lessees Or Contractors – Automatic Status When Required In Construction Agreement With You endorsement (CG 20 33). This endorsement is very restrictive. It automatically extends additional insured status to “any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy.” It’s very likely that this endorsement will not satisfy the additional insured requirements of the contract. Finally, there’s the Additional Insured — Owners, Lessees Or Contractors — Automatic Status For Other Parties When Required In Written Construction Agreement endorsement (CG 20 38). This endorsement has the same wording as the CG 20 33 plus, “Any other person(s) or organization(s) you are required to add as an additional insured under the contract or agreement described in Paragraph 1. above.” In other words, if the contract requires them to be an additional insured, they are. None of the above endorsements provide completed operations coverage for the indemnitee.
Therefore, the Additional Insured — Owners, Lessees Or Contractors — Completed Operations endorsement (CG 20 37) must be added to satisfy this requirement. The second issue is limits. Does the contract require that the limits be “project specific” (for a contractor) or “location specific” (per the terms of a lease)? If so, the Designated Construction Project(s) General Aggregate Limit endorsement (CG 25 03) or the Designated Location(s) General Aggregate Limit endorsement (CG 25 04) must be added. These endorsements stipulate that the CGL policy’s general aggregate limit applies separately to each designated construction project or to each designated location. Finally, does the contract have a requirement that the indemnitor’s insurance shall be primary and non-contributory? Primary and non-contributory for whom – the indemnitee only or all additional insureds? The Primary And Noncontributory — Other Insurance Condition endorsement (CG 20 01) is added to address this requirement. But does it satisfy the requirement? This endorsement states, “This insurance is primary and will not seek contribution from any other insurance available to an additional insured under your policy provided the additional insured is a Named Insured under such other insurance.” Therefore, there could be a conflict between the requirements of the contract and the coverage provided by this endorsement. Trying to satisfy the requirements of contracts our insureds sign is a pain. I’ll be the first to admit that. However, just remember, if your insured is sued for breach of contract the only insurance that may be available is your E&O policy.
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Hard facts about digital documents How to benefit from electronic transactions
Keep up with technology to keep your agency costs down. Transacting electronically is legal, beneficial and easy to adopt thanks to the newest products. On the following pages, youâ€™ll learn the why, how and what of electronic transactions.
Primary Agent | February 2014
icture it: It’s nearing four o’clock on a wintry Tuesday afternoon. You hang up with a hot prospect in the neighboring town who’s ready to seal the deal, but the snow is piling up outside your office window, and the traffic report sounds nothing short of hellish. Yet within five minutes, you have a signed application in hand, and that prospect is looking very much like a customer. Oh, and you never left the warmth of your office. There was no science-fiction-grade teleportation or sorcery involved. Credit simply goes to the emerging technologies of electronic transactions. What was once a multi-day process of sending and receiving an application through the mail or a multi-hour endeavor to deliver a policy in person across town now can be accomplished, quite literally, at the click of a button. In insurance agencies, adopting new technology — understandably — can be a source of anxiety. After all, any change in process brings with it E&O, compliance and workflow considerations. But there are times when it pays off to take a chance, and the adoption of electronic transactions is one of them.
Why adopt electronic transactions Independent agencies that implement electronic-transaction technology consistently provide positive feedback. Their enthusiasm stems from several benefits: Increased productivity The switch to electronic transactions drastically reduces the time staff spends printing, faxing, scanning and mailing documents. Plus, there are direct cost savings associated with reduced paper, toner and postage usage. Increased efficiency The rate and speed of return on applications, selection forms and other documents sent electronically is significantly greater than those provided in hard copy. And less time spent following up on paperwork is more time available to sell and service accounts. Increased customer satisfaction Customers report that electronic transactions are convenient and professional, and for younger customers, it meets their expectations for conducting business electronically and instantaneously. Plus, the e-signature vendors allow for agents to add a cover letter or other communication to the documents requiring signature, which further builds upon the relationship. Reduced E&O exposure E-signature vendors build privacy and related compliance protections into their products: secure transmission, encryption, time stamps, tracking and even the ability to ensure documents are fully completed and signed before they’re returned. What’s more, the very nature of 
What’s an electronic transaction? w Emailing a policy as a PDF w Mailing a policy on a CD w Securing an application or
policy signature electronically
One agency’s experience When one of its carriers sponsored a trial test, Insurance Center Associates of California gave electronic transactions a whirl. Agency President Mike Randles reported a 98 percent completion rate of the electronically distributed documents. Forty-two percent of respondents returned the paperwork within an hour; 70 percent did so within the first day.
the shorter turn-around time in securing signatures and returned documents reduces E&O exposure. But beyond these points, one of the most compelling arguments to utilize electronic-transaction technology is that direct writers rely on it, … and why should they be the only ones to benefit? When independent agents add this capability as an underlying business practice, it creates a win-win for consumers: They receive the value of working with a trusted, local advisor and the convenience of conducting business electronically.
How to adopt electronic transactions Simply put, state and federal laws establish that “a document or signature cannot be denied legal effect or enforceability solely because it is in electronic form.” In fact, the federal Electronic Signatures in Global
and National Commerce (E-SIGN) Act specifically states that it applies to the insurance industry. E-SIGN establishes the legal right — and the legislative encouragement — to transact electronically.
reply confirming receipt of the disclosure. E-signature vendors typically incorporate compliant disclosure and consent processes into their product.
As a consumer-protection mechanism, the E-SIGN Act and states’ respective Uniform Electronic Transaction Acts (UETAs) require that customers receive a disclosure and provide their consent to transact electronically. IA&B offers a sample disclosure and consent form online (IABforME.com/ electronic_transactions) that meets the following criteria.
E-signature products simplify the process for agents and their customers: There is no software to download or hardware to install on either end of the transaction.
The written disclosure must include: w Option to receive paper copies w Right to withdraw consent (and any consequences, if allowable by state law) w Procedures to withdraw consent and update contact information w Description of how to obtain hard copies (and any fees, if allowable by state law) w Explanation if consent applies to a particular transaction or to categories of records w Hardware and software requirements to access/ retain records And, the customer must demonstrate the ability to transact electronically — for example, by providing consent via an email or text
What the process entails
Once registered with an e-signature vendor, an agent logs onto a secure website and downloads the necessary documents from the agency’s system. From there, he or she can define which fields on the documents should be signed, initialed, dated or require other action, and in which order; attach a personalized (and branded to the agency) message requesting the customer’s review and action; and then enter the email address of the customer to whom the documents should be sent. If documents require more than one customer’s signature, the agent can include more than one customer as a recipient and set the routing order in which customers receive and can act on documents. An email notification is then sent to the customer, who is prompted to access the vendor’s website and guided through the process of completing and signing the documents. The documents then are returned securely to the agent, who has received notices throughout the process: when the customer accesses the documents, completes them and returns continued on page 12
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My Events FEBRUARY & MARCH
FEBRUARY 2014 4
CISR Personal Residential
P&C Licensing Study Course
Lehigh Valley, Pa.
CISR Personal Lines Miscellaneous
CISR Personal Lines Miscellaneous
CISR Personal Auto
E&O Risk Management
CIC Agency Management
L&H Licensing Study Course
CISR Personal Auto
William T. Hold: 3 C’s—Comp, Crime & Cyber
CIC Life & Health
William T. Hold: Dealing with Disasters
William T. Hold: Dealing with Disasters
Lehigh Valley, Pa.
CISR Personal Lines Miscellaneous
James K. Ruble Graduate Seminar
Ellicott City, Md.
William T. Hold: 3 C’s—Comp, Crime & Cyber
P&C Licensing Study Course
CIC Personal Lines
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AGENCY MANAGEMENT continued from page 10
DocuSign at a discount
them. In the end, the agent has access to a complete audit trail of the transaction.
Enjoy a 20 percent discount from the premier e-signature vendor, DocuSign. Adopt the latest electronic-transaction technology to save time and money, increase customer satisfaction and reduce E&O exposure. And use your IA&B membership to get it all for less.
There are a myriad of compelling reasons to adopt electronic transactions into an agency’s workflow. Resistance to change won’t win, or keep, customers. It’s time for independent agents to take advantage of the technologies upon which direct writers rely — and to one-up those direct writers by combining the benefits of transacting electronically with the personalized service that only independent agents can provide.
We extensively researched the e-signature products on the market, and DocuSign came out on top. Our vetting process looked at legal compliance, customer service to agents and insureds, ease-of-use and other features, including branding and communication options.
This article draws from the December 2013 Power Hour webinar, “The Hard Facts about Digital Documents,” available in its entirety at IABforME. com/power_hour. Additional resources, including a Q&A and sample disclosure/consent form, are posted at IABforME.com/ electronic_transactions.
Learn more in a Power Hour T ake 60 and learn more about how your agency can benefit from electronic transactions. ur December 2013 Power Hour webinar, “The Hard Facts about O Digital Documents,” provides the ins and outs of sending documents electronically and selecting an e-signature provider. A recording and corresponding materials are available online.
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IA&B is a resource for more than just coverage or claims, but also on how we operate and do business. David King President/CEO Horst Insurance
MY Agency IA&B is the Agents' Agency for coverage and loss-control resources. We specialize in: ■ Errors & Omissions ■ Agents’ Umbrella ■ EPLI ■ Data Breach Explore you options through our Sales Center at IABforME.com/sales. [ 13 ]
Multiple monitors New view on monitors, productivity
If two monitors are better than one, it stands to reason that three (or more!) lead to even greater productivity. Here, insurance-tech guru Steve Anderson makes a case for more monitors â€” and new ways to use them.
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Primary Agent | February 2014
’m not exactly sure when I first started talking about agencies needing to use more than one monitor for their staff. I think it was over 10 years ago. At the time, agency owners and staff did not think adding a second monitor to their desks would help them be more productive. Today, it’s hard to find an insurance agency that does not have dual monitors on most every desk. The productivity gains are significant. If you haven’t yet made dual monitors the standard office feature, you need to do that as soon as possible. But I figure that if two monitors help improve productivity, then why not add a third or fourth? Adding a third monitor is a trend I have seen in agencies over the last couple of years. These agencies report an additional increase in productivity for certain positions in the agency. For example, I believe that every personal lines and small commercial CSA should have at least three monitors on their desk. Given the variety of insurance company portals and rating systems that staff is required to use daily, it just makes sense to have that additional monitor real estate. Another option I recommend you consider is to use the third or fourth monitor as a document-viewing monitor. The advantage of using a monitor in portrait mode (not landscape) is the aspect ratio of a standard 8.5 x 11 piece of paper that fits almost perfectly the screen size when mounted in portrait mode. This means that staff will be able to view the full page of a policy on that monitor without having to scroll up and down. And, depending on the size of your monitor, that full page will be larger than life-size. This simple step will make it much easier for your staff to be able to read and review electronic documents.
Optimizing a monitor for viewing documents is a simple process. 1) Most monitors come set up in landscape mode (horizontal). You simply need to change the orientation of the monitor to portrait mode (vertical). This likely will require a screwdriver to change how the screen is actually mounted to the stand. You can purchase monitors that easily swivel between landscape and portrait mode, although they are typically more expensive.
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I believe that every personal lines and small commercial CSA should have at least three monitors on their desk. — Steve Anderson
TECHNOLOGY 2) Next, you will need to change the orientation of the graphics card for that monitor from landscape to portrait mode. In Windows 7 this is a simple process. Right-click on your desktop and choose screen resolution in the pop-up menu. You should now be able to see the number of monitors you have attached to the computer.
Tech talk Where better to talk tech than online? Discuss trends and network with colleagues on our IA&B LinkedIn group. The forum is for our members and like-minded industry folk to collaborate. So gather your technology conundrums (how many monitors are your colleagues using?) and post awayâ€Ś.
3) Click on the monitor that you have changed to portrait mode, select the orientation drop-down menu, and change the setting from landscape to portrait. You should see the change reflected in the monitors displayed. Click Apply to view the new setting on your monitors.
I recommend you experiment with adding a document-viewing monitor with a couple of people in your organization. This will allow you to determine any issues or problems that might come up before you roll it out to others. Using multiple monitors has provided the biggest productivity boost for the least amount of money. Adding a document-viewing monitor will continue to enhance the productivity of your staff.
Reprinted with permission from Steve Andersonâ€™s TechTips. Subscribe at http://techtips.steveanderson.com.
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Platinum Profile Insurance Agents & Brokers proudly recognizes Liberty Mutual Insurance as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization. FEATURED PARTNER Liberty Mutual Insurance PRESIDENT Mike Winner, Business Insurance Mid-Atlantic Region REGIONAL HOME OFFICE Fairfield, Ohio REGIONAL OFFICES Camp Hill, PA; Columbia MD; Fairfield, OH; Lexington, KY
“Our goal is to help our agents and brokers with their clients’ needs. Our local decision-making authority coupled with the breadth of products and services we provide, makes it easy for them to service existing clients and grow their business as well.”
REGIONAL LEADERSHIP David Lamparella, Regional Vice President, Chesapeake; Donald Waardenburg, Regional Vice President, Pennsylvania UNDERWRITING OFFICES Camp Hill, PA; Columbia, MD; Delaware Valley, PA; Pittsburgh, PA; NATIONAL ACCOUNTS LEADERSHIP Thomas Kelley, Vice President & Managing Director, Mark Morneau, Senior Underwriting Manager NATIONAL ACCOUNTS UNDERWRITING OFFICE Bala Cynwyd, PA A.M. BEST RATING “A” (Excellent) WEBSITE www.libertymutualgroup.com/business
~ Mike Winner
ou’re passionate about your clients. Liberty Mutual Insurance is passionate about protecting them. Liberty Mutual Insurance is a diversified global insurer and one of the largest property and casualty insurers in the United States*, as reported by the National Association of Insurance Commissioners. We rank on the Fortune 100 list of largest corporations in the United States**. We are proud to partner with Independent agents and brokers in Delaware, Maryland, Pennsylvania, and throughout the Mid-Atlantic Region. We are committed to helping our agents and brokers grow their business. Through a single point of
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contact, our agents and brokers have access to the full depth and breadth of products and services offered by Liberty Mutual Insurance. Our agents can write everything from a small commercial policy to a large multinational account and anything in between. We serve the entire market, supporting small, midsized, and large businesses across all lines, offering complete solutions for our agents and their clients. Learn more about us at www. libertymutualgroup.com/business. * based on direct premiums written ** based on annual revenue
Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers. Thank you for your continued sponsorship.
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PLATINUM LEVEL ACUITY Berkley Mid-Atlantic Group Donegal Insurance Group Erie Insurance Group Harleysville Insurance HM Insurance Group Insurance Agents & Brokers Service Group Inc Liberty Mutual Insurance MMG Insurance Company Millers Mutual Group Millville Mutual Insurance Co Mutual Benefit Group Penn National Insurance Swiss Re The Main Street America Group Utica National Insurance Group
BRONZE LEVEL Aegis Security Insurance Co Agency Insurance Company AmWINS Program Underwriters Inc Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Chubb Group of Insurance Companies Conemaugh Valley Mutual Insurance Co Countryway Insurance Company Encompass Insurance Foremost Insurance Group GMI Insurance Goodville Mutual Casualty Company Guard Insurance Group Hanover Fire & Casualty Insurance Company Harford Mutual Insurance Co Insurance Alliance of Central PA Inc
Insurance Placement Facility of PA Keystone Insurers Group Inc
ISU Insurance Agency Network Progressive Westfield Insurance
Lebanon Valley Insurance Company Mercer Insurance Group Merchants Insurance Group
Access Insurance Company Allied Insurance American Mining Insurance Co Burns & Wilcox Limited Cumberland Insurance Group Farmers Mutual Insurance Company of Western Pennsylvania Frederick Mutual Insurance Co ICW Group Insurance Companies Juniata Mutual Insurance Co PSBA Insurance Trust Selective The Philadelphia Contributionship [ 19 ]
Mutual Aid Exchange Penn PRIME Municipal Insurance Reamstown Mutual Insurance Company Rockwood Casualty Insurance State Auto Mutual Insurance Company TAPCO Underwriters Inc The Brethren Mutual Insurance Company The Motorists Insurance Group The Mutual Service Office Inc Travelers Tuscarora Wayne Group of Companies Zenith Insurance Primary Agent February 2014
Primary Agent | February 2014
Technology U P DAT E
SMALL-TOWN AGENCY, BIG-TIME SUCCESS
DAVE WILLIS Dave Willis, senior associate with the insurance-focused communications firm Aartrijk, interviewed Dennis Hilton and authored this article for ACT. Dave can be reached at firstname.lastname@example.org. Dennis Hilton, President of Cheney Insurance, can be reached at dennishilton@ cheneycompanies.com. This article reflects the views of the interviewee and should not be construed as an official statement by ACT.
Dennis Hilton grew up at Cheney Insurance, spending time with his parents in the office as a youngster and joining the family business when he graduated high school. Today, the agency employs more than a dozen people and serves businesses and individuals throughout his region of coastal Maine and beyond. The agency mix is 60 percent personal lines and 40 percent
commercial, which includes a special program for outdoor guides. “We like to think that we insure more Maine guides than any other agency,” notes Hilton, who now is president and sole owner of the company. A few years ago, a trifecta of events led to changes that helped move the Damariscotta-based business to a new level. “We had a confluence of opportunities come [ 20 ]
together in 2010 that has helped drive agency growth in ways I’d never imagined,” says Hilton. In February, he says, the agency joined a regional alliance of like-minded firms. In April, they signed on with Astonish Results, an insurance-focused digital marketing and training firm. Finally, at year end, Hilton bought the agency from his parents.
Agency alliance “The alliance – the North American Insurance Alliance — is like a cluster,” Hilton explains, but we try to avoid using that term. “It’s a group of more than two dozen New England agencies that joined forces and combine premium volumes to gain leverage with insurance companies.” Cheney was the group’s first member. Hilton says the alliance is somewhat unique. “We work to develop two-way partnerships with carriers, making growth commitments in exchange for incentives,” he explains. “It’s working really well.” Hilton says in just a few years, the alliance has grown to more than $200 million in aggregated volume. The arrangement offers more than leverage and incentives. “Our agency is gaining a lot beyond the financial aspects of the relationship,” he explains. “I share with other owners, and my staff interacts with their peers at other agencies. We get great ideas and have been able to build our expertise and increase our effectiveness as a result of our participation.” Agencies get together in-person from time to time. “We recently had a meeting oriented to commercial lines, so we brought together all of the commercial lines staff from each of the member agencies to share ideas,” he explains. “Everybody left energized and ready to implement new strategies and techniques they’d picked up.” Alliance benefits allow Hilton to focus more on growing his business, too. “For some time, I spent a lot of time trying to track volumes and progress in meeting insurance company production goals — trying to read and decipher production reports from multiple carriers,” he explains. “Craig Sargent, who heads the
Alliance, now does all that for us. He keeps me updated and offers guidance so I can concentrate on other management responsibilities.” Digital marketing & sales Signing on with Astonish Results helped bolster the agency’s digital marketing presence and strengthen its client relationships. “Prior to Astonish, we were just like most other agencies; we were order takers,” Hilton recalls. “We did fairly routine types of attempts at cross-selling, account rounding and upselling, but our efforts were weak. Working with Astonish helped us fine tune that.”
The entire staff is engaged in the sales process … even the receptionist, processors and accounting folks.
The entire staff is engaged in the sales process. “Even the receptionist, our processors and accounting folks are included,” he notes. “Of course, agents have a defined sales role and responsibility, but boosting sales awareness throughout the agency has been an important part of our transformation. Everybody has a much greater sales awareness and focus than before.” Astonish helped Hilton understand the importance of social network engagement. “We’ve worked hard to build our audiences and influence on the various social platforms,” Hilton notes. “We hired a social media coordinator, but the initiative is broader than just one person; all of our employees help promote what we’re doing.
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“Rather than be an agency owner who worries about staff being on Facebook during company time,” he adds, “I want them out there. They understand the ins and the outs, what we are doing to attract new audiences, and why.” The social media coordinator drives social engagement and manages agency blogs. “We are doing a good job of leveraging social media effectively,” he explains. “We get reports that indicate what’s working in social media and our other digital marketing activities. This data and best practices information provide a good road map going forward.” An important part of the Astonish offering is customer relationship management software, dubbed the Virtual Profit Center, which drives much of the agency’s electronic marketing and sales work. “Every personal or commercial lead, whether it comes in through the website or a phone call or in person, gets entered into this database, which integrates with our AMS360 system,” Hilton explains. The integration makes it easy for staff to track and follow prospect and client activity. “It helps everyone see where they are in the sales process,” he adds. “In addition, the system supports producer activity with targeted emails based on where leads are in the sales cycle.” To help drive success through the system, agency employees have collected email addresses for some 80 percent of the firm’s nearly 5,000 customers. Full ownership Purchasing the agency was, in some ways, monumental; in other ways, not so much. “I’ve been part of the agency for nearly 30 years,” Hilton explains, “and during that time, I assumed
increasing responsibility. My parents got me involved in leadership early on.” So when Hilton signed the paperwork to make him 100 percent owner at the end of the year, not a lot changed. “I was basically gaining ownership of a business that I had helped grow along the way,” he adds. “I’d hired many of the people who were working here and had seen them develop over the years.” He also had helped drive change over that time. “We try to leverage the technology to our benefit as much as we possibly can,” Hilton notes. “Twenty-plus years ago, we were among the first agencies in our area to implement transactional filing. Eight years ago, we eliminated paper client files altogether.” The agency also uses advanced interfaces where possible. “We have one person on staff who handles all of our downloads,” he explains. “Her goal is to eliminate work for our commercial and personal lines teams.” The agency also is working to enhance quoting and service efficiency through Real Time, and recently introduced DocuSign e-signature capabilities to all staff. Hilton says his parents long encouraged him to seek out efficiency gains and implement needed changes. “My parents have always been very supportive,” Hilton notes. “They recognized the importance of staying current and adapting to market changes.” Even with the long history of parental support, he says, gaining full ownership positioned the agency for even greater success. “It gave me some more freedom of direction and made moving forward a little easier,” he notes. “Their support made for a smooth transition, and we’re really seeing the fruits of the work we all have done.”
Building a brand A key element of the agency’s transition was its presentation to the public. “Astonish provided us not only a strong, interactive website, but they helped us better understand today’s insurance buyer and how to position ourselves by incorporating website features that help people connect with us,” he says.
“Our employees have done a great job learning more about what makes an insurance agency brand strong and then implementing those things — from how we answer the phone, to how we interact with each other and maintain a fun work environment, to how we use technology to support what we do.” “Our employees have done a great job learning more about what makes an insurance agency brand strong and then implementing those things,” Hilton adds. “From how we answer the phone, to how we interact with each other and maintain a fun work environment, to how we use technology to support what we do – everyone has pulled together. “What we’ve done with Astonish and with the Alliance has really revolutionized our sales process,” he notes. “We feel we better understand what’s important and have really focused on that.” To help reinforce the agency’s brand, it developed what Hilton calls “Talk Tracks.” “Every person in the office has [ 22 ]
60 or so cards, all on a ring, addressing potential sales objections and various agency-related topics,” he explains. “The cards provide answers that help increase sales and build employee understanding, allowing them to speak confidently – and consistently – about Cheney Insurance, how we operate, what we offer and how we do it.” Questions range from “Why should I do business with you?” and “What is an independent insurance agency?” to “Should I drop collision insurance?” and “Do you guys give to charity?” Addressing results To help drive staff performance, the agency holds weekly meetings in its media room. “The room has a bigscreen projector, a web camera, a surround-sound system and more,” Hilton explains. “We can display information from iPads, the media room computer, a guest laptop or even DIRECTV or Netflix. It’s great for training, client interaction and staff meetings.” The Tuesday-morning meetings address sales activities and a variety of other metrics. “We look at everything from how many phone calls and walk-in visitors we handled the previous week to how many new email addresses we collected and how many policies were sold or lost—and why,” he notes. “Every person in the company takes part.” Management releases support staff following the metrics discussion and a short videotraining segment, and the agents drill down on lead reviews. Besides weekly meetings, employees gather in a group most mornings – standing in the reception area – and each shares something positive that happened the previous day. “It puts us in a positive mood and sets the stage for another day,” Hilton explains. “Plus, it lets us learn something new about
each person every day; we make another connection and bond more as a group.” Improving processes Agency management taps other tools to drive improvement. “We use technology that Astonish provides to listen to recorded phone calls,” Hilton explains. Each time a call comes in on the Astonish phone line, it is recorded, and when the call terminates, Hilton and his human resources/marketing manager get an email with the recording attached. “We listen to them and choose two or three we send into the media room to share with the staff,” he explains. “Nobody knows, when they get a phone call whether it came in through the Astonish number, in which case it’s
recorded, or direct, so everybody is on their toes every time.” Initial reaction to recording calls was mixed. “Some people were uncomfortable hearing their own voices, especially in problematic phone calls,” Hilton recalls. “But we’ve worked together and everyone’s on board. Now, it would seem strange to not listen to calls.” What may have helped is an agency “Wall of Cash,” with sealed envelopes containing anything from $5 to $100. “If we hear an employee asking for an email address or a cross-sell or something else we’re targeting, they are invited to go to the wall and pick an envelope,” he adds. “Everybody is engaged, and it’s become a very important part of our overall strategy.”
Recordings also form the basis for staff training. “Calls let people see where they might be deficient or uncomfortable with something, and we use them to point out where we can help them do better,” Hilton notes. In addition to ongoing call-based and other training, the agency holds twicea-year staff development days – much like in-service teacher training days – to bolster employee performance. “Once in the fall and once during the winter, we close the office for the whole day, but bring staff in for role-playing and other learning,” Hilton explains. “Each time, we have a number of training segments going on simultaneously; our people learn a lot.” continued on page 24
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Bright future Hilton is enthusiastic about the agency’s progress and prospects. “The work we’ve done helped us get a better handle on our operations and positioned us for great things ahead,” he explains. “Prior to three years ago, I probably could tell you where my real great performers were and where the other folks might have been. But now, we all see it together with our own eyes. It helped us build a stronger agencywide sales culture and zero in on what’s most important.”
of the country, has endured some tough economic times over the past few years. As a local business, we’re an anchor in the community, and we’re committed to making our region stronger.
The agency is leveraging these successes and is broadening its focus. “We started growing a benefits division last year,” Hilton notes. “That’s an area where we’ve been somewhat deficient, but we recently acquired a nice book of life and health insurance accounts, and now we have a more solid foundation on which to build.” He says the agency’s involvement with Astonish Results, the Alliance and a best-practices program have filled a certain void. “I can see that now everything is coming together and we are probably better positioned than ever to start working in a positive, consistent direction,” he says. “We’re a small-town agency, but that doesn’t need to limit us,” Hilton explains. “We now write business throughout the state of Maine, and that has been another factor in our evolution. It’s allowed us to hire some great people. We’re constantly trying to attract new talent – star performers who can help us as we grow. “I’m committed to paying our staff an above average wage, because they are above-average performers, and that has really helped,” he adds. “Our area, like nearly every other part
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“As I look back over the past few years, I see how far we’ve come,” he concludes. “We’ve been through a lot, but we’re doing quite well, and there’s a lot of excitement within the company about what lies ahead.”
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Name: Millennium Star Diamond Owner: De Beer’s Size: 203.04 carats Insurer: XL Insurance Insured value: 100 million English pounds In 2000, London’s Metropolitan Police foiled a plot to steal the Millennium Star and other De Beers diamonds from the city’s Millennium Dome. Combined, the diamonds were valued at 350 million English pounds, which would have made the heist the world’s largest robbery. Source: postonline.co.uk, lloyds.com, bbc.co.uk ________________________________________________________________
The Last & Least column is dedicated to the industry’s oddities — from creative claims and kooky coverages, to (tasteful) jokes and strange stories. Submit yours to IAB@IABforME.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.
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